Chinese majority owned Savannah Cement has started production, becoming the latest entrant into the local cement business.
The cement firm, with an annual capacity of 1.5 million tonnes, says it has received orders from countries such as South Sudan, Congo, Rwanda, Tanzania, Uganda, Burundi, and Somalia.
“The demand for cement has outstripped supply necessitating investment in the sector,” said Benson Ndeta, Savannah Cement chairman during a media tour of the company’s factory on Friday.
The Athi River-based company says it has invested Sh8.5 billion to put up the company and the export market will be its key target.
However, Ndeta cautions that competition and energy costs remain a threat even as they venture into one of the fastest growing sectors. Savannah Cement is a joint venture between Kenyan and Chinese investors. Savannah Heights owns 40 per cent stake while Chinese Wan-Ho and Acme Wanji own 40 per cent and 20 per cent respectively.
“We value our partnership with the Chinese investors as they are equiped with world recognised knowhow on the cement production process adn this is what attracted us to form this partnership,” said Ndeta.
The firm says it can produce up to 6,000 metric tonnes per day as it has five packing lines operating at the same time. The plant plans to put up a clinkering line as part of its expansion in the next two years. Kenya has a capacity of 3.5 million tonnes against demand of three million tonnes a year.
Kenya has five other companies in the cement sector, including Bamburi, East African Portland Cement, and Athi River Mining. Others are Cemtech Ltd, Devki, the Mehta Group, and Mombasa Cement.
Central Bank monthly economic review for February 2010 says total cement production rose by 18.1 per cent in January 2010 compared with January 2009, to reach 292,769 metric tonnes.
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